WRC Report on Unpaid Severance across the Garment Industry during Covid-19

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April 22, 2021

Dear Colleagues,

I want to share with you a new WRC report on the problem of unpaid, legally mandated severance across the global apparel supply chain during Covid-19. You can also read coverage of the report from the New York Times.

The report is part of a year-long effort by the WRC to track factory closures and severance payments, worldwide, since the outset of the pandemic. Given the frequency of nonpayment of legally mandated severance during normal times in the apparel industry, we were concerned that such violations could happen on a large scale during the pandemic. This is what our research has found.

The report is not focused specifically on collegiate apparel but on the industry as a whole. We enumerate 31 cases of nonpayment across six countries, affecting more than 37,000 workers, who are collectively owed almost $40 million in legally mandated compensation.

There are two collegiate factories discussed in the report, and I am pleased to say that, in both cases, remedies are already agreed, and workers either have been paid in full (in one case) or will be (in the other). We reported to university affiliates on Uni Gears in Bangladesh last month and Elim in Guatemala earlier this month. These cases will also be reviewed during the annual WRC university caucus meeting tomorrow. We do have ongoing investigations of possible severance violations at other collegiate factories, and we will report to you on these as warranted.

Beyond the 31 confirmed cases of nonpayment covered in the report, the WRC identified more than 200 suspected cases that it has not been possible to investigate fully. Even this large number of cases represents a modest fraction of the closures and mass layoffs that have taken place across the industry over the last year. The WRC estimates that total arrears to garment workers, in unpaid severance, across the apparel industry during Covid-19, is more than half a billion dollars.

The breadth of the problem, and the long history of unpaid severance before the pandemic, demonstrates the need for a collective solution. That is why the WRC is urging brands and retailers to consider a new proposal, now under discussion, for an industry-wide agreement to create a global severance guarantee fund. In the meantime, we are working, to the extent resources allow, to help workers secure the compensation they are owed at the individual factories covered in this report.

Best, 

Scott Nova